World over, access to energy is a lifeline. Reliable, affordable, and sustainable power creates quality jobs, protects livelihoods, boosts security, drives down the cost of doing business and promotes economic growth.
According to economic regulation theory, competition is an enabler to reduction in prices, improved service delivery, consumer experience and delight. Kenya has been among trailblazers in having in place The Energy (Electricity Market, Bulk Supply and Open Access) Regulations beginning May 8, 2026.
This follows decades of progress which saw the traditional vertically integrated utility model evolve to unbundling of generation, transmission and distribution in the electricity sector. Developed economies such as the United States of America and India have been on the path to open access for over two decades. The United States began implementing open access in phases in 1920.
The reforms aim to provide new suppliers access to the market, potentially reducing costs for consumers.
While the goals for open access may be common, each country’s journey and challenges remain unique and shaped by every nation’s peculiar economic, social, and regulatory environment.
The open access concept allows different providers of electricity to make use of the underlying distribution and transmission infrastructure owned by incumbent utility companies at a fee in the form of wheeling charges.
The regulations speak to the establishment and participation in the electricity market, bulk supply, open access, market governance, principles, operations and functions of the system operator among other pertinent issues.
There is no doubt that adopting a more ambitious conception of access may bring conflicting priorities, as well as a scale of challenges, more clearly into focus. A key concern has been that of utility death spiral, in simple terms, a situation where customers reduce their reliance on and leave traditional utilities, forcing them to raise rates on the remaining clients with fears of even driving even more customers away, causing revenue drain and possible financial collapse.
However, and in the words of Sakshi Pawar, Vivek Shastry and Andrew Kamau, open access is not just about opening the grid to more players; it’s about building a resilient, transparent, and competitive electricity market that benefits consumers, investors, and ideally the environment.
Now, more than ever, Kenya needs to ensure that the benefits of energy and more so clean and renewable power are available to all. This is not only a matter of equity but a Kenyan constitutional and statutory imperative. Indeed, traditional utilities such as Kenya Power and Ketraco may have to consider decoupling and diversifying their revenues and profits from energy sales to include transmission and distribution lines monetisation and optimisation.
The Energy and Petroleum Regulatory Authority on the other hand and in discharging its statutory mandate should continue to ensure just and reasonable, cost-reflective tariffs and the implementation of the regulatory framework that allow the utilities to recover the fixed costs of long-term contracts from the broader market created after liberalisation.
Ibrahim Kitoo is a Corporate governance professional & legal counsel
